A Medical Device Daily

dj Orthopedics (San Diego), specializing in rehabilitation and regeneration products for the non-operative orthopedic and spine markets, reported closing its acquisition of Aircast (Summit, New Jersey) late last week.

In the deal – first unveiled in February – dj Orthopedics acquired Aircast from its shareholders, including majority owner Tailwind Capital, for about $290 million in cash (Medical Device Daily, Feb. 28, 2006). Antitrust review of the deal was completed earlier this month (MDD, April 3, 2006).

Les Cross, president and CEO of dj Orthopedics, said, “We will now turn our focus to the roll-out of the combined organization's sales strategies and on the timely integration of Aircast's manufacturing and administration functions. On the sales side, we have the opportunity to leverage the strength of both the DonJoy and Aircast brands in the U.S. and in Europe.“

He noted the complementary nature of the two company's products, dj Orthopedics strength in new bracing and Aircast's focus on ankle bracing.

“The acquisition also complements and strengthens our existing franchises in fracture boots and in cold therapy products,“ Cross said. “We are also very excited about our new sales opportunities with Aircast's VenaFlow vascular system for the hospital-based prevention of deep vein thrombosis after surgery.“

Cross said that some of Aircast's administrative functions now will be moved from its New Jersey headquarters to dj Orthopedics' California headquarters to generate domestic operating synergies. “Also, we will soon begin relocating certain Aircast manufacturing operations into available capacity that we have at our award-winning production facility in Mexico. The expansion of this facility in Mexico is proceeding according to plan and should be completed by late summer.“

He predicted integration of the new business in six to nine months “and we therefore are on target to realize the full annualized benefit of $15 to $20 million in integration synergies in 2007.“

He noted syndication of the company's $350 million term loan financing for the acquisition was locked in at a “favorable“ rate of LIBOR plus 1.5%. “The size of the term loan was reduced from our original expectations due to our strong cash flow during the period since we announced the acquisition.“

He said that the company will report some details of its 2006 expectations in a May conference call.

Aircast's product line includes cold therapy systems, fracture boots and specialty products. The vascular systems business includes products to prevent deep vein thrombosis.

Fresenius Medical Care (Bad Homburg, Germany), the world's largest provider of dialysis products and services, reported that its subsidiaries, Fresenius Medical Care Holdings and Renal Care Group (Nashville, Tennessee), completed the sale of 96 freestanding renal dialysis centers to National Renal Institute , a wholly-owned subsidiary of DSI Holding (both Nashville, Tennessee), in accordance with a consent agreement with the Federal Trade Commission. The spin-off, the result of the Fresenius/Renal Care merger, was first reported in February (MDD, Feb. 17, 2006).

Fresenius said that nine more Illinois centers will be sold upon receiving Illinois regulatory okay, expected in 2Q06, as part of an agreement to sell 105 centers. Fresenius said it will receive about $511 million in cash for all of the centers being divested, subject to post-closing adjustments.

Fresenius, through a network of about 2,000 dialysis clinics worldwide, provides dialysis to around 157,000 patients.

DSI, a portfolio company of Centre Partners, acquires and operates dialysis treatment clinics, hospitals and acute care centers. Centre Partners has committed capital of roughly $780 million.

In other dealmaking activity:

• C. R. Bard (Murray Hill, New Jersey) reported completing its previously disclosed acquisition of Venetec International (San Diego, California). The deal for the purchase of Venetec for $166 million was first reported earlier this month (MDD, March 3, 2006).

Venetec's StatLock line of catheter securement products now will be marketed by Bard's Medical division in Covington, Georgia.

C. R. Bard is focused on providing technologies in the fields of vascular, urology, oncology and surgical specialties.

• Healthcare Quality Solutions (HQS; Tampa, Florida) reported acquiring substantially all of the assets of VantaHealth Technologies , including VantaHealth's flagship software product, the Analyzer.

For the purchase HQS will pay $950,000 in cash and 100,000 shares of HSS common stock. It said it expects the acquisition to add about $1.1 million to HQS's 2006 revenue.

HQS said the addition of the Analyzer and other VantaHealth assets will enable it to expand its services to home healthcare in preparation for the introduction of the Pay-for-Performance rules expected in 2007 by the Centers for Medicare and Medicaid Services (CMS).

HQS and VantaHealth services assist homecare businesses manage daily operations. The Analyzer provides decision support information based on the analysis of financial data extracted from the home healthcare company's billing system. HQS provides real-time decision support over the Web to homecare by analyzing patient assessment data at the patient's start-of-care and discharge mandated by CMS. HQS said it intends to deliver the VantaHealth services over the web as it does with its PPS Advantage services.

HQS is a subsidiary of Health Systems Solutions (also Tampa), an information technology services firm.